natural gas

Orbán said he was victorious in Brussels again

Viktor Orbán government Brussels

Hungary has been granted exemption from the European Union’s gas price cap, “which will therefore not jeopardise secure gas supplies” to the country, Prime Minister Viktor Orbán said on the sidelines of an EU summit in Brussels in the early hours of Friday.

“We have managed to protect Hungary’s interests,” the prime minister wrote in a Facebook message. Orban said the European Commission’s energy proposals had “posed the greatest danger” for Hungary. “Adopting them would have risked a stoppage of gas deliveries to the country within days,” he said.

That threat, he said, had been averted: “Hungary was not left alone and managed to negotiate a fair deal”. “We agreed that even if a gas price cap were introduced in Europe, it would not impact the long-term agreements without which Hungary’s gas supplies would be made impossible overnight,” Orbán said.

Participants in the summit also agreed that if there were joint gas purchasing in Europe, it would not be mandatory for Hungary.

“That’s important because we can only bring domestic energy prices down with more sources of supply at our disposal, with more competition on the Hungarian energy market,” he added.

Orbán: Good chance of ‘asserting Hungarian national interests’

Before, Prime Minister Viktor Orbán has said he sees a “good chance” of asserting Hungarian national interests at the EU summit in Brussels. In a video uploaded to Facebook on Thursday, the prime minister said the key question was “how to combat skyrocketing energy prices”.

Orbán said some elements of EU proposals were “in stark contrast” to Hungary’s national interests, such as jointly procuring energy on a mandatory basis and a common European price cap, as extant contracts for Hungary’s gas deliveries would be invalidated and the country would be left without energy supplies.

The prime minister said other leaders of EU member states were similarly minded as Hungary, “so chances are high that we’ll be able to assert Hungarian national interests tonight,” he added.

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Hungarian FM: Gazprom reaffirms commitment to continuing supplies to Hungary

Szijjártó_Moscow

The CEO of Russia’s Gazprom has reaffirmed his long-term commitment to continuing the operations of the TurkStream pipeline and maintaining gas supplies to Hungary, Foreign Minister Péter Szijjártó said in Moscow on Wednesday night, adding that Hungary’s gas supplies were secure despite the current crisis.

Following talks with Alexey Miller, Szijjártó said the energy supply crisis in Europe raised serious concerns about the coming heating season, but added that “it is at least as important how supplies for Europe could be secured in the next two to three winters since delivery via the northern routes has in fact become impossible”. TurkStream is the only remaining route with uninterrupted gas delivery from Russia, “which has proven that it was worthwile to construct it”, the foreign ministry quoted Szijjártó as saying.

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Concerning the goal of his Moscow visit, Szijjártó said he had wanted to “ascertain that a long-term cooperation with Hungary is also in Gazprom’s interest and to get their commitment for a long time cooperation with us”.

Gazprom will “shift the focus of its supplies” from north to the southern route, and will also redirect smaller supplies to Hungary via Austria to TurkStream, Szijjártó said. “This will make Hungary’s energy supply even more secure,” he added.

Szijjártó noted that TurkStream’s components had been made in Russia, therefore their maintenance was not hindered by European Union sanctions. He quoted Miller as saying that procedures by Dutch authorities were not jeopardising the pipeline’s operation.

Referring to Gazprom’s commitment to ensuring predictable supplies to Hungary in the long run, Szijjártó said “everybody could be quite certain that no restrictions will be necessary in Hungary in terms of gas consumption”.

Szijjártó said an agreement between Hungary and Gazprom to ensure deferred payment for gas supplies would be signed on Thursday.

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Hungary prepared for winter, energy supplies secure

Menczer Cegléd

Hungary is prepared for the winter period and its energy supplies are secure, a government official said on Thursday.

Noting Hungary’s long-term gas purchase agreement with Russia, Tamás Menczer, state secretary for bilateral relations at the ministry of foreign affairs and trade, said the TurkStream pipeline delivers gas to Hungary from the south through Turkey, Bulgaria and Serbia; the only gas pipeline that operates at 100 percent capacity.

Hungary’s energy supplies, he said, are secure and its gas storage facilities are 46 percent full, as against the European average of 26 percent. The gas stored is enough for uninterrupted consumption over 93 days, he added at the opening of a new plant by semiconductor manufacturer Infineon Technologies built with HUF 6.4 billion (EUR 15,1m) of government support.

The 31.9 billion forint investment by Infineon Technologies in Cegléd, in central Hungary, has created 275 jobs, he said.

German-Hungarian economic cooperation is a success story, with 6,000 German companies employing some 300,000 Hungarians, he added.

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Shell: Hungary could run out of gas oil by November

shell

Many companies replace expensive natural gas with diesel. Supplies could run out in Hungary by November, said Sarolta Vecsey, mobility director for Hungary and Slovenia at Shell Hungary.

“Due to the current energy market’s volatility, there could be a shortage of gas oil, starting from November,” Sarolta Vecsey said. Many industrial consumers have switched from gas to diesel, which has a similar calorific value but is still much cheaper, napi.hu reports.

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Shell has 193 service stations in Hungary. Since the introduction of the price cap in November 2021, Shell has communicated that the measures are causing market difficulties. There has been a shortage of officially priced products at wells before.

Shell also temporarily suspended the operations of five of its domestic service stations over the summer due to supply difficulties. The extent of the loss suffered on the sale of the official fuel was not disclosed by the company’s management.

Sarolta Vecsey does not believe that the current situation is in the interests of the larger chains since managing the extra traffic poses issues for everyone. Small wells also experience significant losses, index.hu writes.

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EP urges price cap on pipeline-delivered gas

Hungary's plan to build an undersea pipeline to Israel goes viral

The European Parliament is urging the European Commission to submit proposals on capping the price of natural gas delivered through pipelines from Russia, as well as an update of EU gas purchase regulations to curb the price of imported gas, the EP said late on Wednesday.

In a resolution passed at the plenary session on Wednesday, the EP called on member states to ensure that citizens failing to pay growing energy bills are not cut off from the services, and to strive to avoid the eviction of struggling households.

Meanwhile, energy companies making extra profits on high energy prices must contribute to curbing the fallout from the crisis, the resolution said. The EP welcomed the EC resolution introducing an emergency cap on revenues of companies with low operational costs.

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The EP again called for a full embargo on imports of oil, coal, nuclear fuel and gas from Russia and for fully ending deliveries via the Nord Stream 1 and 2 pipelines.

The EP group of ruling Fidesz responded by slamming Hungarian left-wing parties for “taking the side of sanctions again”.

MEP András Gyürk said in a statement the price cap on pipeline-delivered gas would be equivalent to new sanctions. Meanwhile, the EP’s “leftist liberal majority” is urging immediate embargoes on Russian energy imports, he said. Hungarian leftist parties agreed with those sanctions and continued to demand new ones, Gyürk added. “It has been proven that Hungarian people and companies grappling with the energy crisis caused by the sanctions can only count on the Fidesz-Christian Democrats,” he said.

“We shall not give in to political pressure harming the interests of Hungary. The time for harmful sanctions is over; we have to focus on helping families and companies,” he said.

István Ujhelyi, an MEP sitting in the Progressive Alliance of Socialists and Democrats who recently left Hungary’s Socialist party, said he supported the resolution as it condemned Russia’s war as a direct attack on European values. He also voted for the passages on protections for struggling households but abstained in the vote on those on the energy industry. “I maintain my stance to support energy measures only if Hungary is prepared to fend off its negative effects,” he said. Had Fidesz spent EU funding appropriately rather than “enriching their own families”, Hungary would be much more resilient to the crisis now, he said.

In a statement later on Thursday, Fidesz MEPs said an EP decision scheduled to be adopted on Thursday demanded new sanctions. The gas price cap would lead to falling gas supplies, “an absurd idea” on the cusp of the heating season, the statement said. The “irresponsible decision” would deepen the crisis and make Europeans pay the price of war, it said.

“We Fidesz MEPs are protecting the interests of Hungarians. We will not support proposals that put Hungarian energy supplies and jobs at risk,” the statement said.

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Hungarian city has to resort to brutal emergency measures due to soaring costs

szolnok city hungary

The mayor of Szolnok addressed the city’s residents in a Facebook post about the effects of the energy crisis. The city would make drastic cost cuts, and the planned measures will be decided on Thursday by the Szolnok assembly.

Ferenc Szalay reported that the rise in energy prices will mean an additional HUF 700 million (EUR 1.75 million) in expenditure in Szolnok on top of the HUF 777 million (EUR 1.88 million) planned for this year. What is more, next year, at current prices, they will have to set aside HUF 4.1 to 4.7 billion (EUR 9.9-11.4 million) for gas and electricity, Portfolio reports.

The measures to be taken

The following steps will be decided at Thursday’s general assembly:

  • Street lighting will be switched off between 0.00 and 4.00 AM, except on Fridays and Saturdays.
  • The old building of the Aba-Novák Agóra Cultural Centre (Aba-Novák Agóra Kulturális Központ) will close for the winter.
  • Szolnok TV will move to the Agóra and the office building at 1 Baross street.
  • The Szigligeti Theatre will be closed from December until the end of February, with no performances.
  • RepTár – Szolnok Aviation Museum will be closed in January and February.
  • The Tiszaliget Sports Hall will be closed, and will only open for the matches of Szolnok Olajbányász KK (Szolnok Oil Miners Basketball Club).
  • Some buildings of the Damjanich János Museum will be closed for the winter.
  • The branch libraries of the Verseghy Ferenc Library will be closed for the winter, and the upper two floors of the county library will be closed.
  • The beach on Véső street will not be open in winter.
  • The city’s nurseries and kindergartens are up and running, with groups being moved from some of the more expensively heated buildings to more modern ones.
  • At the town hall, the central heating will be set at 18 °C. Further ways to reduce energy bills are being explored.

The above steps are expected to save 34 percent of electricity consumption and 26 percent of gas consumption.

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TurkStream’s security crucial for Hungary, says foreign minister

Péter Szijjártó unacceptable

The security of the TurkStream gas pipeline is of paramount importance for Hungary, Péter Szijjártó, the minister of foreign affairs and trade, told a conference in Kazakhstan on Wednesday.

Szijjártó addressed a meeting of energy ministers of the Organisation of Turkic States (OTS) in Almaty. The minister highlighted the increasing importance of the TurkStream pipeline, which is delivering natural gas from Russia via Turkey, Bulgaria and Serbia to Hungary. Especially now when gas deliveries via the Nord Stream pipeline under the Baltic Sea are suffering disruptions, he said.

Szijjártó called on the leaders of countries being a partner to TurkStream to keep monitoring the pipeline’s operation. He said on Facebook the Hungarian government had repeatedly been attacked in connection with the implementation of the TurkStream project, adding that “without this pipeline, Hungary would be in a big trouble”.

Referring to the European Union’s sanctions against Russia, Szijjártó said they had led to a serious energy crisis in Europe with global implications. “The sanctions could be more painful for Europe than for the Russian Federation,” he added. The security of energy supplies is a physical, rather than an ideological or political issue for the Hungarian government, “therefore it is not a political question either, where energy is bought from,” he said.

The Hungarian government will never support any sanctions that could compromise the country’s energy supplies, “whether it is nuclear energy, oil or gas”, he said, adding that the government would represent the same position during talks on the EU’s 8th package of sanctions. 

The Hungarian government has worked to diversify energy supplies, and the TurkStream pipeline has “proved to be the best investment”, as this is the only one coming from Russia that “is working with a 100-percent security”, the minister said.

TurkStream supplies 50-60 percent of Hungary’s gas supply, Szijjártó said, adding that it had facilitated building reserves to cover 42 percent of the country’s annual consumption. He warned, however, that new sources had to be identified, and pointed to Central Asia, which has 10.5 percent of the world’s gas deposits. He urged that the EU should take steps to build infrastructure to provide access to gas in Azerbaijan, the Caucasus and Central Asia, and to negotiate relevant deals.

An upgrade of the Trans-Anatolian, and Trans-Adriatic pipelines is necessary, while the Southern gas corridor should be linked to central Europe through the Western Balkans, Szijjártó said. The government also supports projects to import Azerbaijan’s green power, produced by wind farms, through a cable under the sea, he added.

Concerning the upgrade of Hungary’s Paks nuclear plant, Szijjártó said the plant supplied half of the country’s demand, adding that the government would not support “any EU sanctions that would hinder implementation of the project” by an international consortium led by Russia’s Rosatom.                       

Szijjártó noted that the OTS member states and observer countries had outlined their priorities in green transition at the session. He said the Hungarian government was committed to the cause of environment protection, but warned that “the green cause must be prevented from being disappropriated by political movements”.

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Ridiculous? Hungarian politician gave away goldfish to save energy

Goldfish Fidesz

The parliamentary group leader of Orbán’s Fidesz, Máté Kocsis, announced he would give away one of his aquariums because of the energy crisis. He kept his goldfish in it, which he gifted to one of his friends who has a pond in his garden. Meanwhile, István Simicskó, Kocsis’s counterpart in the parliamentary group of Fidesz ally KDNP, highlighted the importance of solar power.

A difficult decision

Fidesz held a two-day-long parliamentary group meeting in Balatonalmádi, followed by a press conference. Máté Kocsis, the parliamentary group leader, told journalists that he would give away one of his aquariums and his goldfish to save energy, index.hu reported.

“I took my fish to one of my friends who has a small pond in his garden. That was a hurting decision for me because I have been keeping fish for 35 years”, Kocsis added. He also highlighted he would continue to switch off the light at home and in the office. István Simicskó, the parliamentary group leader of the Christian Democrats, said he would like to extend the solar panels placed on the roof of his house.

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Energy authority: Gas storage facilities over 70 pc full

Hungary’s gas storage facilities are over 70 percent full, putting the country in the third best position in Europe in terms of the amount of gas stored compared to annual gas consumption, the Hungarian Energy and Public Utility Regulatory Authority (MEKH) said on Thursday. The authority said that on Sept. 19, gas storage facilities were 70.11 percent full and the total volume of gas stored reached 4.44 billion cubic metres. This amount equals 112.26 percent of annual residential gas consumption, it added.

In terms of the amount of gas stored compared to total annual gas consumption, Hungary stood at 40.55 percent, behind two countries that also store transit gas: Austria with 72.91 percent and Slovakia with 53.39 percent. In line with the schedule included in European Union regulations on gas storage, Hungary must store 35 percent of its five-year average consumption by November 1, which equals 3.65 billion cubic metres, MEKH said. Owing to fast storage filling in Hungary, it already has 42.57 percent of the past five year’s average consumption stored in underground facilities, it added.

“Gas supplies in Hungary are undisturbed and the filling of storage facilities is progressing as normal,” the authority said.

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Foreign Minister: Govt’s energy stance based entirely on Hungarian interests

szijjártó and haavisto

When it comes to European Union proposals on energy supply, the government bases its position entirely on Hungarian interests and it has nothing to do with considerations related either to Ukraine or Russia, Péter Szijjártó, the foreign minister, said after meeting his Finnish counterpart on Thursday.

Stance on the EU gas price cap proposal

At a joint press conference held with Pekka Haavisto in Budapest, Szijjártó welcomed the withdrawal of the EU gas price cap proposal, saying Hungarian energy security would have been compromised since Russian gas supplies to the country were at stake.

He said the government backed European attempts to reduce energy consumption but purely on a voluntary basis. Energy taxes should only be levied at national level, he added. The minister said European proposals should treat energy supply as a pragmatic rather than a “political or ideological issue”.

Hungarian-Finnish relations

Meanwhile, Szijjártó noted that a Finnish foreign minister had not visited Hungary in the past twelve years, and friendship and kinship between the two nations warranted more intensive relations. He praised bilateral relations and cooperation in UN organisations, as well as the increase in trade turnover, which reached 650 million euros last year. Around 70 Finnish companies employ more than 5,000 people in Hungary, he added.

Szijjártó and Pressman

Responding to journalists’ questions, Szijjártó said he had met the new US ambassador David Pressman the previous day for a “pleasant” 90 minute conversation. Whereas neither attempted to resolve differences of opinion, they looked at ways each country could count on the other to improve relations, he said, adding that they made a personal commitment to work towards this.

The report on the rule of law

Commenting on the European Parliament’s report on Hungary and the rule of law, the minister said “well-paid EP representatives” should address real European problems instead of “repeating all kinds of false accusations” against Hungary. “We wonder whether some people in Strasbourg and Brussels actually think that Hungarians are not sufficiently mature to decide on their own future,” he said.

Paks nuclear power station

On the topic of the expansion of Hungary’s Paks nuclear power station, Szijjártó said the EU had made clear there were no restrictions on the peaceful use of nuclear energy. Notwithstanding attempts to hobble the project, “whoever hinders … [it] breaks European rules and violates our national sovereignty.”

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Can we expect mass closure at Hungarian petrol stations?

Fuel

Smaller petrol stations have trouble refilling their fuel stocks and accessing state aid. According to Eszter Bujdos, managing director of holtankoljak.hu, only abolishing the price caps could solve the problem – reports Index.

During her interview with InfoRádio, she explained that there was no risk of another upcoming fuel shortage. Now that summer vacations and tourist season are over, everyone travels less, and families started to try to save money on gas. It also helps that the agricultural workers have already acquired most of the necessary supplies, so the demand seems to be decreasing to its normal level.

Oil and gas pipe Russian oil
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Still, only the abolition of the price cap can improve the financial situation of small petrol stations and normalize the fuel stocks. Even without the maximum price, it would take weeks to top up the stocks at the stations to a normal level, according to the managing director of holtankoljak.hu.

If the price cap remains, it can be expected that hundreds of smaller petrol stations will close in the next six months because they cannot fund their losses.

These businesses are facing serious difficulties. They cannot fill up their fuel tanks because MOL only provides a limited amount for them, and primarily delivers to its bigger partners. The process of accessing state aid is also slow and problematic for the operators. The amount of the subsidy is lower than they said – 16 HUF (0.04 EUR) per litre, instead of 20 HUF (0.05 EUR). However, even some of those that have a contract are yet to receive the money.

Viktor Orbán Kötcse leader
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For now, the official statement says the current price cap for fuels and foods will remain until the 1st of October. It is still possible that the government will announce an extension in the next few days, but according to Minister of Economic Development, Márton Nagy, they must carefully consider keeping the caps with the current inflation.

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EU price cap on Russian gas: Brussels won’t like Hungary’s opinion

Oil and gas pipe Russian oil

Hungary will in “no way” support a proposal to introduce a cap on the price of gas in Europe, Foreign Minister Péter Szijjártó said in Brussels on Friday, adding that such a measure would be a “sanction in disguise” leading to further increasing energy prices and serious challenges in terms of the security of supplies.

The foreign ministry quoted Szijjártó as calling the proposal “absurd”, aimed “in fact to suppress Russian gas imports”. Szijjártó insisted that a member of the European Commission had admitted that the proposed measure would be a political move to cut Russian state revenues and would not result in reduced gas prices. He also said the proposal was “disguised as a price cap” because “as a commercial measure it could be adopted with a two-thirds majority, whereas sanctions need unanimous support”.

Hungary will face serious risks concerning the security of its energy supplies should Russian gas be banned from the European market, Szijjártó said. “The way of ensuring gas supplies for a country is not a political or ideological… but a physical issue,” he said.

“How long does Brussels want to continue its sanctions policy, which runs totally contrary to Europe’s interests?” Szijjártó asked. The sanctions have failed, while the war is escalating and energy prices are ever so high, while energy supplies are more and more problematic, he said.

Introducing a price cap would be a political decision “but we know no political reason to give up the security of Hungary’s energy supplies”, he said. No political reason could make the government “put Hungarians in a humiliating position in which they could not heat, cook or have hot water”, he said.

Szijjártó added, however, that no decision had been made in Friday’s debate. The European Commission will submit a written proposal on the subject in the next few weeks.

Concerning supplies at the moment, the minister said Hungary’s gas storage facilities contained 38 percent of the country’s annual consumption, as against 22 percent in the EU. He said Hungary’s was the third largest figure in the community, and noted that the EU’s directive was 35 percent.

Deliveries of gas purchased on top of contracted volumes are continuous, Szijjarto said, adding that 60 percent of all deliveries were received from the south.

Meanwhile, the minister said the Hungarian government could support four other proposals by the Commission, but added that those proposals could “not address the fundamental problem”, and some of them, in some form, had already been introduced in Hungary.

Financial Times: Hungary has the lowest gas prices in Europe

Viktor Orbán letter Croatian prime minister

Despite criticism, Viktor Orbán has achieved the lowest gas prices in Hungary, HírTv.hu reports based on an article in the Financial Times. The British newspaper compared European gas prices and Hungary came out on top. The article says that no matter how much criticism Orbán receives over his friendship with Moscow, he achieved the lowest gas price for his country in Europe.

Hungary has the lowest gas costs

Prime Minister Viktor Orbán has “managed to keep household gas prices in Hungary the lowest (in the EU) no matter how much criticism he has received”, HírTv.hu wrote on Wednesday based on an article by business daily Financial Times.

The Financial Times has published a lengthy article analysing gas prices in Europe, MTI reports. The article notes that the average price of electricity for British households is at least 30 percent higher than many of its European neighbours. They added that this is because the country relies more heavily on natural gas for energy production, which is hitting consumers hard.

The paper noted that Hungary has by far the lowest household gas costs, and explained that despite criticism from other EU members over its relations with Moscow, Prime Minister Viktor Orbán has signed a number of agreements with Russia that ensure lower gas prices, HírTv.hu reports.

Europe is not doing well

The analysis touches on the fact that average electricity prices for UK households are at least 30 percent higher than many of its European neighbours, and that the whole continent is experiencing an energy crisis caused by a drop in oil and gas flows from Russia. But analysis shows that the direct impact of this on households varies widely depending on the energy mix in each country, Index.hu reports.

They note, however, that electricity prices are expected to rise across Europe this winter as high gas prices continue to spill over into the energy market, while energy supplies from other sources are declining. For example, due to widespread maintenance problems at nuclear power plants in France and dry weather conditions affecting hydropower.

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Huge shortages: new price explosion coming in Hungary

Food price inflation

70 percent of European fertiliser plants halted their operations as natural gas prices soared to unprofitable levels. The natural gas deficit has broad effects as it does not just hit energy production and the chemical industry, but it spirals out to many different sectors too. The price of basic necessities, which require natural gas in any way during their production, may rise to unimaginable levels.

László Bige, the owner of Nitrogénművek Zrt. in Pétfürdő, depicted an appalling impending scenario in response to the inquiry of Index. According to him, the average natural gas cost of the plant in the past 10 years was around 5-20 million. As the price of natural gas is currently around 300 euro/MWh this would mean that the same amount of natural gas would cost approximately 144 million euros per month, not even counting other extra cost rises. This cost increase would mean that the price of nitrogen-based fertilisers would rise to roughly 1,300-1,500 euros per ton. For many farmers, this is too much to ask for.

In some plants there was not any production at all this year, so even with affordable natural gas prices, the industry would not be able to clear the backlog. Europe must expect an enormous fertiliser shortage, which will not just raise prices, due to added cost to agricultural production, but also lower yields as many farmers cannot afford to buy fertiliser. All of these factors will eventually lead to renewed price hikes in the markets of the European Union. Through agriculture and livestock, the consumers will pay the brunt.

But the prices are just one problem because the energy crisis will ruin many businesses which could potentially lead to the toppling of the chemical industry. If the plants cannot restart operations soon, then in addition to the high inflation redundancies may be necessary for various fields, which means rising unemployment.

“Inflation so far is just the beginning.”

The current inflation is only thanks to the grain price hikes from the past year, present increases are just adding up to the current prices. By the end of the year, the population will feel the true burdens of the energy crisis and if Russia cuts natural gas supplies totally for the winter the consequences may be even graver – says the owner of Nitrogénművek Zrt. in Pétfürdő.

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